21 Jun 2022
The Vietnamese economy is facing fresh pandemic-fuelled challenges as the political and economic shocks continue across the globe.
According to the country’s deputy minister of planning and investment, Tran Quoc Phuong, the domestic business climate is facing a series of challenges including inflation and wasting resources.
Inflation in Vietnam will near the government’s 4% threshold according to various forecasts. Former director of the general statistics office, Nguyen Bich Lam said taking into account the delay to Vietnam’s economic recovery and development package, inflation will likely be between 4% - 4.5% this year, and move up to 5% - 5.5% in 2023.
However, HSBC has lowered its inflation forecast for Vietnam in 2022 to 3.5% from a previous 3.7%, as a result of stable domestic food prices, which will help contain headline inflation, as per a report published last week.
Bolstering Vietnam’s absorption capacity and avoiding the waste of resources is also crucial, said Phan Duc Hieu from the National Assembly’s economic committee. The effectiveness of the development programme will also be bolstered by heightened transparency, says a news agency report.
Positive growth remained in Vietnam in 2020 and 2021, despite the impact of the Covid crisis, predominantly due to higher import-export and investment, particularly foreign direct investment. A robust recovery was recorded in several industries, including retail, personal goods, pharmaceuticals, logistics and forestry, thanks to improved Covid containment measures.
According to forecasts by the Asian Development Bank (ADB), economic growth in Vietnam may recover to 6.5% this year and hit 6.7% in 2023. Whereas the International Monetary Fund has lowered its global economic growth forecast for 2022, but added that Vietnam’s recovery will be bolstered by its socio-economic development and recovery programme.